Hit the ground running
Not even a day later from the Liberal election victory plenty of the media narrative has subtly shifted towards this being an effective 'hospital pass' and a bad election to win.
Hmm, if you say so.
I don't imagine the line would've been quite so much that way had Labor won as predicted.
And if there's one thing this week has shown it's that groupthink, echo chambers, and media narratives can sometimes be off the mark.
The reality is that the preceding two elections were arguably tougher ones to win, at a time when either nominal GDP growth was weak or the collapse in mining construction was dragging mightily hard on the economy.
But the mining downturn is now over, and commodity prices have roared, just as the Aussie dollar has weakened to multi-year lows.
Australia is thus set to benefit from an unprecedented surge in iron ore, coking coal, thermal coal, and LNG revenues, as well from its many other commodity and services exports.
The Budget is effectively back in the black, and there is ample firepower to deliver a salvo of personal tax cuts over the coming half decade.
Labor is in disarray and back to wiping its slate clean on tax policies and reassessing its stance on coal, so ScoMo could easily get six years in power if he gets the economy humming.
Labor is in disarray and back to wiping its slate clean on tax policies and reassessing its stance on coal, so ScoMo could easily get six years in power if he gets the economy humming.
And with inflation so low real wages are finally rising again at the best pace since 2012 (all the more so when including bonuses).
Another benefit to low inflation is that the Reserve Bank can safely deliver rate cuts, beginning with 25 basis points in a fortnight's time.
Credit where it's due
It almost goes without saying that the main hurdle for Morrison is the housing downturn and the associated drag from dwelling construction.
There will certainly be a so-termed 'positive shock' from the lack of changes to negative gearing and capital gains taxes.
And the government has also promised a new first homebuyer deposit scheme effective 1 January.
Meanwhile, new fixed mortgage rates are still falling to record lows.
Dichotomous
It's a truism to say that our housing markets are fragmented, but there's a risk of this becoming more so the case while credit restrictions remain in place.
Stock turnover has now officially fallen to the lowest level on record at just over 4 per cent - it's hard for a labour market to fire up when people aren't moving, let alone furnishing and renovating - and new listings have plummeted.
For example, we've seen some huge sales results for houses in the $2 million plus range in Sydney's eastern suburbs (including in Clovelly, Queens Park, Waverley, Bronte...and now even across town in Strathfield) as wealthy buyers squabble over what's close to the greatest dearth in quality new stock listings in memory.
Meanwhile on the city fringe valuations are coming up short and transactions are falling over like ninepins.
Jobs in the development and construction industry are at high risk, with so many developers totally unable to access finance. I genuinely think the government has no handle on what's coming down the pipe here.
Meanwhile on the city fringe valuations are coming up short and transactions are falling over like ninepins.
Jobs in the development and construction industry are at high risk, with so many developers totally unable to access finance. I genuinely think the government has no handle on what's coming down the pipe here.
The prospect of mortgage rates below 3½ per cent may be beguiling for those that can borrow, but too many wannabe market entrants are being knocked back (or, more accurately, aren't bothering to apply in the first place as they know they'll be knocked back).
Looking at bond yields and futures markets an assessment rate buffer of 250bps should be plenty.
